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it gets kind of sobering when you think about it like that. But the reason that I like to bring

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it up is because there's two ways you can use that number to quantify what activities you want to

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engage in. Welcome to the game where we talk about how to get more customers, how to make more

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progress or how to keep them longer, and the many failures and lessons we have learned alone the

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way. I hope you enjoy and subscribe. What's going on everyone? Happy Tuesday. I've got a fun,

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mental activity for us planned around hourly rates. So one of the interesting things about

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being an entrepreneur is that we don't always know what our hourly rate really is. We like to say

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we make extra hour or whatever it is, right? But do you really know what your true hourly rate is?

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It's not your revenue, right? It is your profit. And so a quick back-of-napping formula can get you

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to what your true hourly rate is. And so if you ask an entrepreneur or a small business owner,

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hey, how much do you make? Some of them just respond with revenue, which is funny. Others

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will respond with profit and then they have some sort of caveat of like, well, I invested a lot

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back in the business this year, blah, blah, blah, blah, blah, right? And the reason is why it isn't

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as high as it should be, right? But let's just talk about reality, not fantasy. So in your last 12

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months, if you look at what you made, right? Let's say you made $50,000 in the last 12 months,

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right? Now if you take that number and divide it by 2000, which is roughly a 40-hour work week,

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now here's where it gets interesting is that if you think that you work 80 hours a week,

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then it actually doubles and you're making per hour cuts in half. And so let's just use that

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example first with 40 hours a week, which is 2000 hours roughly, right? That means you make $25 per

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hour. Now if you work 60 hours a week, you make something like 17 and a half dollars per hour.

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If you work 80 hours a week, then you actually make $12. Now it gets kind of sobering when you

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think about it like that. But the reason that I like to bring it up is because there's two ways

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you can use that number to quantify what activities you want to engage in, right? And so the first is,

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I see a lot of entrepreneurs sometimes even earlier on kind of boosting their egos and saying,

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I'm not going to do that work. That work is beneath me, right? The thing is if you actually look at

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their numbers, it's actually not beneath them. It actually, it might be higher than what they're

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currently making. And so being fundamentally aware what you currently make per hour, I think is a

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first step at least quantifying how to evaluate your timings, right? The next thing is that it also

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allows you to put draw a line in the sand and say, over time, I want to decrease the activities that

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I could replace with someone else doing this for me for less than what I currently make per hour.

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And over time, the level of my activities should rise, right? Because if you're fundamentally not

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stopping working anytime soon, right? Then what you're doing is you're sending up the ladder of skill

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set, right? Right now, like the first thing that many people have to out source in a baseline

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service is just the actual low level fulfillment of what they're doing, right? Right after that,

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the next thing the outsource will probably be some sort of administrative activities that are associated

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with that. The next level above that might be financial and billing and collections and all

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that kind of stuff. And then above that, you might have sales, right? And then above that, you might

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have marketing and marketing related activities, the prospect, right? And so all of these activities

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that you're doing have a certain quantifiable value that you can ascribe compared to your hourly

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rate. Another fun thing about the hourly rate is that you can also start quantifying your purchases

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in reverse in terms of time. And so I know that when I was starting out, I would think like,

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I actually remember this specifically. I worked at Smoothie King and I was making 675 an hour.

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All right, I was 15 or 16 years old. And I remember that all my coworkers would always go

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right next door to Quiznos, actually it was called Cozy, and get lunch. And they would drop between

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you know, 10, 15 bucks on lunch. And the thing is that our shifts were six hours. And so we would

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make, let's say, 40 bucks top line, right? And then after taxes, we'd make even less than that.

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Let's say, you know, we, let's say we're, they took 25% of that, right? And so we're now only

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making $30 for this whole shift, right? And half of that, every single one of them would use when

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they go and bought lunch. And so I'm like, if I go here and I get lunch every time I'm here,

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then I'm literally only making $15 for six hours of my time. This doesn't feel worth it to me.

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And yet, I see entrepreneurs do this stuff all the time. And so if you look at your purchases,

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if you look at your real hourly rate, and then you look at the purchases that you make,

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would you then say, I would spend four hours of my time working to get that? A lot of times it's

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sobering. You're like, no, I actually wouldn't do that. And it'll help you keep your budget

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in check for when you're looking at spending money. We'll go, guys, you guys already know that I

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don't run any ads on this and I don't sell anything. And so the only ask that I can ever have

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if you guys that you help me spread the word so we can have more entrepreneurs, make more money,

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feed their families, make better products, and have better experiences for their employees

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and customers. And the only way we do that is if you can rate and review and share this podcast.

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So the single thing that I ask you to do is you can just leave a review,

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but take 10 seconds or one type of the thumb that it means the absolute will have to be

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and more importantly, it may change the world or someone else.

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The other real interesting piece about this is kind of what I was touching on earlier

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were related to ego is that a lot, it's just so many times we don't want to do activities that

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we know will generate money because we have some sort of ego associated with it. And I think one of

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the reasons that we've been able to do well was not being eotistical about the work that I was

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willing to do. Right? And so when I had my gyms and I had six of them, I still was selling every

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day because I knew what I mean per hour and I knew that on average per hour I'd make $500

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an hour when I was selling. And so I wanted to maximize as many hours of my time selling because

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I knew I was making less than that doing anything else. And so I see people right now who don't

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want to take sales calls way too soon because like they're not like you you don't have the bandwidth,

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you don't have the margin, you don't have the padding to outsource your sales so soon. Instead outsource

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everything else that's not revenue generating so that you can focus all of your time on that thing

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until eventually you acquire the next skill set that you can bring someone else in and you have

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enough margin you have enough padding so that you can take a decrease in sales because when

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someone comes in the most expensive part of sales is them not selling. That's the cost of getting

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someone new and it's the lost opportunities the revenue that you should have made that you would

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have made if you had been selling. And so I like just putting this into big bow in terms of number one,

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it first quantify how much you actually make per hour in the real world. Number two,

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and you do that first on two thousand hours but then you can do second on how many hours you

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actually work which is probably more than that. Next, reverse quantify your purchases.

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Quantify your purchases in terms of how much time it would cost you to get that thing and are you

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still willing to put that much time forward to get that thing a lot of times you're not. And the next

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piece of this is making sure that when you look at all the activities that you're doing an easy way

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of doing this is doing a time study which every time I've done a time study I always tell myself I'm

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going to do it again every month that I don't but I end up doing one like once a quarter or twice a

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year but what you do is you just have an excel sheet you printed out and you have the times of

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day broken into 15-minute increments and you just write down what you did for each of those 15 minutes

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right and you can see what types of activities you're spending your time doing. If you think this

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will take you time it will save you so much time or productivity I promise you that the 10 minutes

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of actual writing that it will cost you will cost you far less than the amount of time that you

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want to now get credit for working well and working efficiently. All right but when you do that

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you're able to see what types of activities you do and then more readily outsource the ones that

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are lower because ultimately if you think about the entrepreneurial journey from a from a spiritual

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standpoint from a skill standpoint is that all we're doing is is practicing higher level skills

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at with more and more leverage right first we're doing the things then we're managing people who

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do the things then we're leading people who manage people who do the things and then we're simply

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thinking and guiding things strategically and at this level what you're really doing is is guiding

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the culture and attracting talent that is going to be able to do the things for you at a high level

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and ideally at a higher level than you could even do them and that is where you can get to the level

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of like true ownership chairman of the board shareholder investor because that is where you're doing

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the highest skill activities with relations here time and so anyways understanding the magic

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boundary hourly rate is a great place to either sober you up to the reality instead of always

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pushing how much money you make and simply be like this is what I actually make anything that's

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below this I shouldn't do but anything that is above this I should do right and then over time

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outsourcing the activities from bottom top of what you can replace at market value for an

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equivalent level of service so anyways hope that was valuable for you if you think that was useful

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please drop a comment or like show friends and all that good stuff so have an amazing Tuesday

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because you guys soon lots of love